Defaqto research shows that tracker deal margins have risen sharply since 2007 when some mortgages tracked below the base rate.
Its analysis reveals a two-year tracker mortgage up to 75% LTV currently offers an average rate of 2.45% above the base rate, compared with a margin of just 1.16% in July 2008, when the base rate was 5%.
However, Defaqto said that the difference between tracker mortgage rates and the base rate reached a peak between September 2009 and February 2010, and has fallen since then.
David Black, insight analyst for banking at Defaqto (pictured), said: “The base rate can only go one way, but the question is when, by how much and how quickly – and this is the great unknown. Unfortunately, those that make the wrong judgment are likely to find themselves significantly out of pocket.
“Our analysis shows that, while tracker margins have fallen since early 2010, they are still significantly higher than they were in 2007, before the credit crunch – and this makes the decision-making process even more difficult for borrowers.”
